Telekom Malaysia Bhd (TM) plans to reduce its foreign exchange (forex) losses and mitigate future losses by reducing its US denominated debts. The company is also looking at issuing new debts in ringgit as opposed to foreign currencies.

The recent weakening of the ringgit against the US dollar has made repayment of its US denominated debts more expensive, thus, it incurred an unrealised forex loss of RM8.7 million in the fourth-quarter (4Q) ended Dec 31, 2013, compared to a forex gain of RM5.4 million a year earlier.

“We currently manage our existing borrowings in foreign currency through hedging exercise. We have hedged about 50% of our foreign currency borrowings so we will not be too exposed to the foreign currency changes in the future. Beside that, we are now raising new debts in ringgit,” TM CFO Datuk Bazlan Osman told a media briefing in Kuala Lumpur yesterday.

Bazlan said the company’s current borrowings in US dollar stood at US$765 million (RM2.51 billion).

In the 4Q, the company recorded a 5.2% decrease in net profit to RM344.24 million due to unrealised forex loss and lower tax incentives on its high speed broadband (HSBB) rollout.

The company recorded a net profit of RM363.25 million in the 4Q last year. Its revenue in the same quarter increased 6.1% to RM2.98 billion against the RM2.81 billion recorded in the 4Q last year.

Its group CEO Tan Sri Zamzamzairani Mohd Isa said the increase in revenue for the quarter was mainly due to higher revenue from data, Internet and multimedia and other telecommunications related services which partially offset by decline in non-telecommunications related services.

For the 12 months, TM’s net profit eased 19.9% to RM1.01 billion from the RM1.26 billion recorded in the same period last year. Its revenue, however, grew 6.4% to RM10.63 billion from RM9.99 billion previously.

“UniFi demand remains strong, and we ended 2013 with close to 635,000 customers or an increase of 31.6% against FY12 (financial year ending Dec 31, 2012).

Streamyx continues to see a healthy growth, with more than 650,000 customers to date.

With 1.49 million premises passes on the back of 105 exchanges as at end December 2013, and this translates to a take up rate of more than 43%.

“We are seeing more customers taking up our HSBB packages of 4Mbps and above for both Streamyx and UniFi.

These HSBB customers make up 41% or close to 900,000 of our total broadband customers which bodes well for our new HyppTV packages,” Zamzamzairani said.

For the financial year ending FY14, Zamzamzairani said the company has set a key performance indicator of 6% growth in revenue.

“The outlook for the telecommunication industry in 2014 remains positive, with data and broadband continuing to be our key driver for growth,” he added.